Trading cycles: One Such Example is The Esoteric Cycle

Trading cycles

Updated Nov 2022

We have tested the validity of Esoteric Cycles with 50 years of data on the leading indices. We have never seen this indicator fail to give advance warning of topping and bottoming action. It doe not predict exact tops or bottoms as that is Fool’s endeavour. Once you identify market turning points, you can position yourself for the next move. Sometimes you might get in a bit early, but as the saying goes, the early bird gets the worm, the late the bullet.

Esoteric Cycles works incredibly well with our top stand-alone indicator, otherwise known as the trend indicator. As stated, our objective is not to look for the exact top or bottom but to get in or out when the market is either Bottoming or Topping. Trying to locate the actual top or bottom is best left to people who thrive on failure and have plenty of time on their hands.

Technical analysis is an Art.

To benefit from esoteric cycle analysis, one needs to visualize the cycle, and then one needs to determine if the Esoteric Cycles are oscillating up or down. If they are oscillating down, then the money is made by spotting a sell signal and shorting the markets; a sell signal is usually issued around the peak of the cycle. A sell signal does not mean that the markets are going to nosedive; you will still get up and down movements; nothing drops in one shot. Markets move up and down in waves.

If you can master Hurst’s cycles, you will come one step closer to understanding esoteric cycles. If you did not understand a word I said above, don’t worry about it.

Think of trading cycles in terms of a picture. If you can spot the pattern in the picture (all pictures have a pattern), it’s infinitely easier to identify the market trend. Once you know the trend, the rest is as easy as taking candy from a baby.